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Let Teavana’s Hot IPO Shares Cool Down

Jul 29, 2011, 10:29 am EDT

 Normally, this would have been a tough week for IPOs.  But, at least for new stock issues, investors have been willing to shrug off bad news as well as the doomsday talk about the budget standoff.  On Wednesday, Dunkin’ Brands (Nasdaq:DNKN) had a stellar IPO, with its price spiking 47% on its first day of trading.

A day later, there was another hot deal:  Teavana (NYSE:TEA).  As the name implies, it operates stores that sell tea drinks and accessories.  On its debut, the stock shot up 63.5% to $27.80, bringing the market cap to a cool $1 billion. (On Friday, the shares were off 0.8%).

If you’re a mall rat, then there’s a chance you’ve seen a Teavana store, with its employees standing outside and asking people to try a free cup.  I’ve done it a few times — and yes, I will somehow walk into the store and buy some stuff. Read 

All IPOs Are Not Created Equal

Jul 26, 2011, 12:53 pm EDT

Despite the risk, IPOs offer the potential of getting in on the Next Big Thing.  Just look at investors who bought shares in the offerings of Microsoft (Nasdaq:MSFT), Wal-Mart (NYSE:WMT) and Starbucks (Nasdaq:SBUX) — those were millionaire-makers.

Interestingly enough, we may be on the verge of another IPO boom.  Already this year, there have been standout offerings from companies like HomeAway (Nasdaq:AWAY), LinkedIn (NYSE:LNKD), Zillow (Nasdaq:Z) and Pandora (NYSE:P).

Yet not all IPOs are created equal.  The fact is that the market is quite diverse.  For example, IPOs are often a way for private equity firms to get big returns for earlier acquisitions.  But often these companies have little or no growth, and returns will probably be disappointing.  Read 

Skullcandy IPO — 3 Pros, 3 Cons

Jul 20, 2011, 11:22 am EDT
Skullcandy IPO — 3 Pros, 3 Cons

Back in 2003, Rick Alden was listening to his portable music player while on a chairlift in Park City, Utah. It was at that moment that he hatched the idea for premium headphones for those who liked extreme sports. He wasted little time and started up Skullcandy (NASDAQ:SKUL).

It was definitely a smart move — the company priced its IPO late Tuesday at $20, above its $17-$19 expected price range, giving it a valuation of $189 million. In Wednesday’s trading, the shares were up nearly 10% to $21.90.

Despite persistent unemployment in the U.S., Skullcandy seems to have little trouble finding customers willing to pay $100 to $200 for headphones. So, it should be no surprise that investors are interested. Read 

Google+ May Be a Minus for Social-Network IPOs

Jul 12, 2011, 1:10 pm EDT
Google+ May Be a Minus for Social-Network IPOs

Whenever I hear that an investment trend is a sure thing, I instantly get skittish.  After all, in today’s hyper-competitive world, which is also beset with huge economic challenges, things can turn sour quickly.

So, yes, the latest sure thing is that the IPOs of Facebook, Zynga and Twitter will be mega hits.  That take is based on solid logic — hey, despite yesterday’s plunge in the market, LinkedIn’s (NYSE:LNKD) shares were actually up (going above the $100 mark).

But in the social world, a hot property can easily become a ghost town.  A recent example of this, of course, is MySpace, which was recently sold for a pittance.  There are many other examples, like Friendster and Tribe.  Often, these failures were the result of poor execution and the fickleness of users. Read 

Zynga — 3 Pros, 3 Cons

Jul 5, 2011, 12:24 pm EDT

When Mark Pincus founded Zynga in 2007, his mission was to connect the world through games.  He thought it would become a significant activity on the Web.

It turned out to be a huge idea – and his team has executed extraordinarily well.  Zynga is now the dominant player in social games.  In its short history, the company has generated $1.5 billion in bookings with franchises like CityVille, FarmVille, Mafia Wars, Words with Friends and Zynga Poker.  The company also generates substantial net income and cash flows. 

In fact, more than 90% of revenue comes from selling digital items.  These include castles, animals, farm equipment and so on.  It’s a tantalizing business model. Read 

Zynga Zooms Into IPO Sweepstakes

Jul 1, 2011, 3:58 pm EDT
Zynga Zooms Into IPO Sweepstakes

Over the past few months, Wall Street has shown its hunger for growth companies – especially those riding the “social” wave.  No doubt, the huge interest in the LinkedIn (NYSE:LNKD) offering was a taste of this.

But now the investment community will get what it wants: deals from the hyper-growth social companies.  After much anticipation, Zynga has filed its plans for an initial public offering.

The company appears to be riding a rocket.  Of course, Zynga is the creator of major gaming franchises like CityVille, FarmVille, Mafia Wars, Words with Friends and Zynga Poker.  In fact, the company’s daily active users are more than the next 30 social game developers combined. Read